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Business

‘Trump bump’ pays off big for some blue-chip CEOs

Opening Sequence

Opening Sequence

Business

‘Trump bump’ pays off big for some blue-chip CEOs

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COMING UP:‘Trump bump’ pays off big for some blue-chip CEOs

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Transcript

00:00:01
>> Which will become->> The Trump bump that's carried US stocks to record levels has turned into an absolute boom for CEOs of some of America's biggest companies. According to a Reuters analysis, President-elect Donald Trump's win has made stock options great again, even for the likes of Goldman Sachs, CEO Lloyd Blankfein, who has a cameo role in one of Trump's anti-establishment campaign ads.
00:00:24
And JP Morgan CEO Jamie Dimon, who Trump once called the worst banker in the United Statese Reuters' Tim McLaughlin has been crunching the spreadsheets.>> JP Morgan CEO Jamie Dimon's options have increased. By about $50 million since Trump was elected. Meanwhile, Goldman-Sachs CEO Lloyd Blankfein's options were worthless on the eve of the election.
00:00:47
But since the stock market rally, those options have gone from a negative 7 million to a plus 11 million.>> All that's thanks to the Trump bump the market got since election day, pushing up the Dow Industrials by nearly 10%, with expectation tax cuts and easier regulation promised could help the economy.
00:01:07
It's not just the financial firms. Caterpillar, the company that makes the heavy machinery that would be used for Trump's infrastructure plan saw its company's outgoing CEO Douglas Oberhelman's options get a $10 million boost after Trump's victory.>> One of the criticisms of stock options for CEOs is that they are not linked to any financial performance metric.
00:01:30
Some critics point stock option as one of the main culprit for opening up the pay gap between the top executives and workers.>> Trump himself has criticized high CEO pay in 2015. And you see this guys making this enormous amounts of money is the total and complete>> But not all CEOs get the big pay boost, the heads of Coca Cola and Merck saw their options declined post elections.